Moonshots & Unicorns: Investing in Startups

I became financially independent within 10 years of finishing residency by doing a few simple things. I earned a lot, saved aggressively, and invested simply.

In that first decade, almost all of my investments went into stocks via mutual funds, primarily index funds. I added a small bond allocation in year six or seven.

After reaching FI, while still working, I diversified by adding some passive real estate investments, and I left medicine with a net worth about double what I figured my family would need to be set for life.

With that excess, I felt comfortable taking additional risks with some of that money that would have the potential to receive returns much higher than you normally see with index funds and real estate.


Investing in Startups


I’ve invested approximately 15% of our assets into mid-stage and late-stage startups over the past couple of years. If current valuations hold up, these now represent more than half of our current net worth.

I don’t like to count my chickens before they hatch, and only one of these investments has had an additional funding round since I invested (at 21x the initial value), so my spreadsheet hasn’t been updated to show that gain, but the next few years could be exceptionally interesting.


A Series of Fortunate Events


It was early 2020, and my family and I were enjoying the good life in Spain for a couple of months. A reader named Jawwad Khan reached out, asking me to take a look at some unique real estate investments offered by a real estate startup named Compound where he was working.

I not only looked, but I invested a bit of my own money into an unleveraged condo in Miami. That investment has now gone full circle, giving me an IRR of about 9% annualized. That’s not bad at all for a real estate deal with no debt, but that’s not the kind of return that’s going to make you scream with excitement, either.

Fast forward a few months.

We’re all in lockdown, hiding from a virus, and Jawwad has some exciting news. Compound is being acquired by Republic, a multi-faceted fintech startup in its fifth year, and I would have an opportunity to invest in the larger company.

Normally, this isn’t something I would consider, but private companies are not valued like public companies, meaning it’s not an efficient market, and as a strategic partner, I was being offered shares at a valuation that was calculated a couple of years earlier when the company was notably smaller.

We had zero excitement in our lockdown lives, and I happened to be sitting on a lot of cash thanks to some tax loss harvesting gone wrong. I decided to take the plunge, splitting the money between a real estate fund I’d been considering and an investment in


My Rationale for Active Management and Pre-IPO Investing


What was my rationale to take a departure from index fund investing?

There is an incredible amount of money made between a startup’s seed stage and an IPO or acquisition, if either happens. When you invest exclusively in publicly traded companies, you have zero opportunity to get in on that meteoric rise from one funding round to the next. Getting in early is a way to diversify your stock holdings beyond what VTSAX can offer.

Now, it’s quite possible that any individual company may never be acquired by another or go public. Most startups don’t get that far. This is why it’s wise to invest in multiple startups rather than putting all of your eggs in one Series A basket.

With input from Jawwad, I’ve added investments in several more promising startups in the space and technology sectors via Republic Capital (the private venture arm of for accredited investors. I’ve made most of these investments in a self-directed Roth IRA set up by Rocket Dollar ($50 off setup fees with code PHYSICIAN).

Two of these investments are in space companies that have made the news recently. Firefly Aerospace successfully reached orbit in only its second rocket launch attempt and has a contract with NASA for a lunar landing module, a true #moonshot. Axiom Space partnered with SpaceX to bring private astronauts to the International Space Station, and Axiom is building a production studio for Tom Cruise to be the first actor to film a motion picture in outer space.

I’ve also invested in a fund offered by Republic Capital that will further diversify my pre-IPO investment portfolio. Yes, this is active management, but I believe there’s a role for picking and choosing investments in markets that are not as transparent and efficient as the publicly traded stock market.

If any of these companies that I own in my Roth IRA really take off, there will be no tax consequences. On the flip side, I won’t be able to claim tax losses from any failures, and I’ve got 13 years to go before I’m 59.5 years old and able to withdraw earnings without penalty, but I do think that a Roth IRA is a great place to hold investments like these. Peter Thiel agrees.

I’m investing with money that I can afford to lose, and I do expect to lose some of it, but if one investment returns 5x or 10x (or 21x like my investment in Republic, a unicorn now as a private company with a valuation of more than $1 Billiion), any potential losses could easily be more than offset with the outsized upside.

My friends at Republic Capital are making it easier to diversify across a spectrum of startups with strong potential. With the technology sector struggling in recent months, I expect there to be excellent opportunities to find value in pre-IPO companies that can no longer command sky-high valuations, and I’ve committed some of my Roth IRA money to a fund put together by Republic.

I’ll pass the mic to my friend Jawwad Khan with Republic Capital. Again, for full disclosure, I do own a small slice of this company and I’ve made numerous investments in other companies on the Republic platform.


Introducing Republic Capital


by Jawwad Khan, Partner, Republic Capital

While many of you may be familiar with our parent organization,, the group here at Republic Capital (R/Cap for short), runs relatively silent, but we run deep.

From deep tech (space, satellites, climate), Web3 (blockchain and its infrastructure), to fintech (Republic itself is a fintech unicorn), we have constructed a portfolio that sits on the cap tables of some of today’s most successful companies. We find them early, we enhance the sustainability of management, and provide a galaxy’s worth of connectivity that helps us crystallize both mission and financial success for the companies we invest in.

Republic Capital, is the private, venture capital arm of and was founded in 2019 as a subsidiary. We manage about $800 million in assets and have returned over $140 million in principal and profit since our inception. We’ve built a business investing early in non-obvious industries. We always factor in liquidity for our investors, with the target of returning capital to investors in three years.

We were not immune to the fact that starting an asset management business, particularly in venture capital, typically requires a track record when marketing to prospective investors. Republic Capital had virtually no track record when we began in late 2019, aside from the founding partner, Christian Sullivan’s personal track record. Christian had invested in several early startups, fifteen of which paid off handsomely as they reached unicorn status (+$1 billion).


Building a Track Record

Our earliest investments proved to be foundational, in that they gave us a base to build our track record. We were very early investors in a small company (at the time) called Relativity Space. Their pitch to us was that they would drastically reduce the cost of building rockets by 3D printing them. Yes, radical, but not far from achievable. They built the largest 3D printer in the world, and currently have the rocket standing on the launchpad ready to go later this month from Cape Canaveral.

While the world was panicking at a looming pandemic and recession during 2020, we kept on investing in businesses that will persevere in challenging markets. Gaming is typically recession proof, and that was the overarching conviction when we made our investment into Dapper Labs at the beginning of the pandemic. We returned a net 88x multiple on invested capital to investors a year after our initial investment.

Most recently, we achieved a significant win with Firefly Aerospace, an Austin, TX-based launch company that made it to orbit on their second launch attempt. For those of you who follow the space industry, you’ll appreciate how important this milestone is for a rocket company. Contrast that to SpaceX, who at the brink of bankruptcy made it to orbit on their fourth attempt.

Space is indeed hard, but we manifest every unfair advantage we possibly can when evaluating aerospace & defense opportunities. We ascertain that government contracts are in place, deeply diligence the technology, obtain board seats (where appropriate) and structure downside protection in the event of a bankruptcy.

The crisis in Ukraine is bringing a deeper focus on building American rockets, and sending astronauts to space from American soil. This was clear when Northrop Grumman chose Firefly to replace their Russian made engines to Firefly engines in their flagship rocket, the Antares just a few weeks before the company had orbital success.



“Buy at the Sound of Cannons. Sell at the Sound of Trumpets”

Uber, Slack, WhatsApp, Venmo, Pinterest, Airbnb, what do they all have in common despite solving for separate needs? They all emerged during the Great Recession of 2007 to 2009.

Some of the greatest companies we recognize today were born in an economic trough. This is a consistent theme throughout past business cycles, and certainly will be the case as we navigate the current economic climate.

Fundamentals look bleak, but the technology sector in 2022 is full of opportunity, specifically in deep tech, Web3, and fintech.




  • Deep Tech: Deep Tech, such as space and climate, will impact the world as fundamentally as the Internet did and is leading the fourth wave of innovation. Such innovations are starting to become much more visible and impactful to a wider audience of businesses and consumers. We can expect breakthroughs to become more tangible, directly solving global social and business challenges.
  • Web3: The collapse in institutional trust, skyrocketing public debt, and hike in interest rates has united forces behind decentralized technologies with interwoven financial incentives. New blockchain protocols are legitimizing the next generation of smart contract use cases while Web3 creates a new Internet that is owned by builders and users and orchestrated by tokens.
  • FinTech: Both public and private FinTech valuations have reset globally this year with prices falling 50%+ off the highs and multiples contracting 60%+. There will be meaningful opportunities to deploy capital into state-of-the-art FinTech solutions at the right price. Furthermore, there is a growing realization of FinTech’s growth potential in international markets.


The Republic Capital team believes private market investments offer excellent opportunities to support growing companies with tremendous potential upside. We have benefitted from portfolio companies increasing their valuations in the 10x to 100x range, and have realized gains within that same spectrum, returns that one very rarely sees with publicly traded stocks.

As is true of any investment with potential for high returns, there is risk of capital loss when investing in privately held companies, and one must be a qualified investor with sufficient income and net worth to invest with Republic Capital. As many of you may know me from previous investments, I’ve spent a lot of time investing on behalf of physicians and medical professionals. I’ve been keen on demystifying the world of venture for them. I have several physicians in my family who would be investing into half-baked ideas were it not for me stopping them!

Please feel free to reach out via email. For general inquiries, contact [email protected] or to reach the author of this piece, email [email protected].



8 thoughts on “Moonshots & Unicorns: Investing in Startups”

  1. Enjoyed reading this article very much. A couple follow up questions
    – the PoF Portfolio tracker is legendary. How do you track your start up investments, both independently and in regards to how it relates to your entire portfolio? Particularly given their illiquid nature and different approaches to calculating returns (eg IRR)
    – Would be interested to hear your thoughts on deal flow. Are you exclusively investing through VC funds like Republic Capital (more passive)? Or are you sourcing and leading your own deals/term sheets (more active)? Put another way, how passive versus active do you approach this asset class in your portfolio?
    -The idea of using Roth space for risky, actively managed alternative asset classes likely runs counter to most WCI/POF/Bogleheads/etc teachings. I understand the appeal for tax purposes. But philosophically feels at odds to the passive investing doctrine. It would be interesting to hear additional nuance on this topic

    • Good questions, Trevor.

      I consider them to be stocks in my asset allocation, and I have chosen NOT to update the net asset value after a valuation increase, because that still feels like counting chickens that have not yet hatched (and may never hatch). If and when I have an exit (as in I cash out or the stock becomes publicly traded), I’ll then update the spreadsheet then.

      In terms of active or passive, I haven’t sourced my own deals and I’ve only invested via Republic in these startups. Unless you count the small investments I’ve made in craft brewery startups, that is.

      Regarding Boglehead style investing, regardless of what account I use, these do not fit. My rationale is that I’m doing it with “play money” that is external to the bulk of my portfolio, which is more or less a sliced and diced 3-fund portfolio. I think using the Roth IRA makes a lot of sense for risk assets, but the inability to claim tax losses is a significant drawback.

      I hope that helps.


  2. Subscribe to get more great content like this, an awesome spreadsheet, and more!
  3. What does “opening an allocation” to the PoFire community mean exactly? When WCI did this with Cityvest there was a lowered minimum and reduced fees. Is this something similar?

  4. Great post, I’ll have to do more investigation into Republic Capital, thanks for sharing this. Web3 and in particular Blockchain Technology is going to be huge. I see a future world where most contracts and agreements will be on a public blockchain and verified by stakers or miners, and NOT internal bureaucrats, which will be better for institutional trust.


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